Trading Tutorial – Seasonal Trading - RPW Traders

Trading Tutorial – Seasonal Trading

A seasonal pattern is a recurring price action during a particular time or in more simple terms - what normally happens.

Seasonals are based on an assumption the price action of a symbol in the near future maybe similar to historical price action around a similar previous time period given no material effect to the symbol DURING THE NEAR FUTURE

So what does this mean for us...

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Seasonal Trading Overview

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Summary:

  • A seasonal pattern is a recurring price action during a particular time.
  • There are reasons why seasonal occur but they key is the regularity of events.
  • There are many types of Seasonal but we go over 2 types: End of Day data and Intra Day data.
  • Seasonal analysis has a number issues that you need to be aware such as data mining, no guarantee of reoccurring and the timing of seasonals maybe early or late.
  • However, we believe our trading is benefited by using Seasonals and we go through a couple of example of our trading charts with our proprietary Seasonal indicator showing how we use seasonals.
  • Finally we show you how you can start testing Seasonals using online software, data and sample Seasonal code - all without spending a lot of money.

Tutorial Overview

1) What are Seasonals

The first part of the tutorial is about explaining what is a Seasonal. A seasonal pattern is a recurring price action during a particular time or in more simple terms - what normally happens.

Seasonals are based on an assumption the price action of a symbol in the near future maybe similar to historical price action around a similar previous time period given no material effect to the symbol DURING THE NEAR FUTURE

2) Why Seasonal Occur

There are many reasons why a seasonal pattern might occur. It will be different for each particular type of symbol, such as a commodity, currency or stock. However, the common key reason is a regularity of an event. 

This means you will need to be aware that if the event does change then the seasonal pattern might change as well.

3) Types of Seasonals

There are many ways to calculate a seasonal. In the tutorial I show 2 types of seasonal. One based upon End of Day data and the second based upon IntraDay data. 

4) Issues with Seasonals

We use Seasonals because it shows us "what usually happens". It is an important part of our trading and investing toolbox but there are some issues with Seasonals you need to be aware of. Issues such as:

  • Data Mining
  • No Guarantee to continue
  • Seasonal timing maybe early or late

5) How We Use Seasonals

We use a custom Seasonal Indicator. It calculates the anticipated future direction of the symbol. We use seasonals for both direction as well as strength and/or weakness.

6) Start Testing Seasonals

In the final section, we go over how you can start testing Seasonals. You need to test as Seasonal analysis may or may not suit you and your trading style. We look at where to go for online software, data and Seasonal code. Then we look at 2 possible ways you might want to test on how to implement Seasonal Analysis.

Are You Getting The Results You Want?

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Are you new to trading or investing? Possibly you have been trading or investing for a while but not getting the results you want.

Then have a look at what we do. We trade Share CFDs with End of Day daily data and using our proprietary comparative strength and seasonal analysis. We also invest in ASX shares with End of Day weekly data and combine both fundamental analysis and technical analysis.

Each report has a $7 trial for 1 month for first time subscribers. Click the buttons below for more information. 

About the Author

Paul Lightbody is the founder of RPW Traders. He has been trading and investing for over 20 years, specialising in combining seasonal and comparative relative strength analysis. When he isn't researching or trading the markets , he likes to get out of the office and get to a rugby game or strap on a tank and go scuba diving.